California Trucking Association AB5 case still pending

Two recent petitions filed to the U.S. Supreme Court were tied to trucking and California’s worker classification law, Assembly Bill 5. On Monday, Oct. 4, the Supreme Court denied one of those petitions. However, the other case – and a preliminary injunction blocking AB5 from being enforced on motor carriers – remains in play.

The Supreme Court on Oct. 4 denied a petition from Cal Cartage Transportation Express to hear the trucking company’s case that California’s AB5 is preempted by federal law.

The California Trucking Association’s case, which is tied to the injunction, is still pending.

There was some confusion regarding which case had been denied, as Reuters published a story on Oct. 4 that the high court had rejected the California Trucking Association’s petition. The trucking group told Land Line on Oct. 5 that the Reuters report was incorrect and that they aren’t expecting to hear a decision on the case until late November or early December. Reuters corrected its article on the afternoon of Oct. 5.

“We’ve had to clarify that with several people,” said Shawn Yadon, CEO of the California Trucking Association. “Our case is still pending, and the preliminary injunction is still in place.”

The case argues that AB5 is in violation of the Federal Aviation Administration Authorization Act (F4A), which prevents states from enforcing a law or regulation related to a price, route, or service of motor carriers. Groups opposed to AB5, including the Owner-Operator Independent Drivers Association, contend the law could force the end of the trucking industry’s owner-operator model.

Although the Cal Cartage case is over, it is still possible the Supreme Court will choose to hear the California Trucking Association’s case against AB5.

“The contributions of California’s 70,000 independent truckers have been vital to keeping the United States afloat during this supply chain crisis,” the California Trucking Association wrote in a statement following the Cal Cartage denial. “They deserve their day in court, and we are hopeful that the U.S. Supreme Court will grant the CTA’s petition in CTA vs. Bonta.”

The history

In 2018, the California Supreme Court’s Dynamex ruling established the ABC Test, which considers all workers to be employees unless the hiring business demonstrates that three factors are established.

The ABC Test:

A. That the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact.
B. That the worker performs work that is outside the usual course of the hiring entity’s business.
C. That the worker is customarily engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed.

In September 2019, California’s senate passed AB5, which codifies the California Supreme Court’s decision. The law, which was intended to apply to a variety of industries, went into effect Jan. 1, 2020.

The California Trucking Association sued and the U.S. Southern District Court of California granted the preliminary injunction to stop the state from enforcing it on motor carriers.

On April 28, the U.S. Court of Appeals for the Ninth Circuit ruled 2-1 that California’s AB5 “is a generally applicable labor law” and called for the removal of a preliminary injunction against enforcing the state law on motor carriers. In June, the Ninth Circuit denied the California Trucking Association’s petition for a rehearing en banc (by the full panel of judges).

The California Trucking Association then filed a petition to the U.S. Supreme Court, and the injunction remains in place until the U.S. Supreme Court makes a decision.

OOIDA was one of more than a dozen organizations to file amicus briefs in support of the California Trucking Association’s petition.

“OOIDA urges the court to grant the Petition for Certiorari and settle this issue before the trucking industry must bear the burden of restructuring its workforce across the country to comply with California’s labor policy choices,” the Association wrote in its brief filed on Sept. 10.

The U.S. Supreme Court also received amicus briefs from the National Motor Freight Traffic Association, the Minnesota Trucking Association the Western States Trucking Association, the Intermodal Association of North America, the Transportation Intermediaries Association, the U.S. Chamber of Commerce, the American Trucking Associations and Truckload Carriers Association, as well as from various shipper trade organizations, and a joint brief from the other 48 state trucking associations. The Washington Legal Foundation also filed a brief in support of the petition on Aug. 16.

The Cal Cartage case started in 2018 as a driver classification lawsuit. The company petitioned the Supreme Court in April. LL